IHTM25012 - Investigating business relief and businesses: Reviewing form IHT413 or D38

You should start your investigation by looking at the information on form IHT413 or D38, then check if 100% business relief (IHTM25021) applies.

Form IHT413 is one of the supplements to form IHT400. It gives details of the business or partnership interest included in the deceased’s estate and provides information to support the taxpayer’s claim for business relief.

Form D38 is used instead of the IHT413 if the business or partnership interest was an asset of a trust or included in a lifetime transfer.

Both forms are designed to obtain the information you need to confirm whether 100% business relief is available in straightforward cases, and to establish the value of the business interest if 100% relief is not due. The information they contain may also be used to investigate a claim for business relief at 50%.

Box 1

Tells you if the business interest was owned for the two-year period required by the ownership test (IHTM25301).

If the answer at box 1 is no you should check the rules for the test (IHTM25301) as the 2- year ownership requirement is relaxed in certain circumstances.

Boxes 2 to 6

Business relief is not normally available for a business interest that is subject to a binding contract for sale (IHTM25291).

Boxes 7 to 17

Identifies the business or interest in a business. The answers given should provide information to establish whether the business interest is relevant business property (IHTM25141). This will tell you if it is the type of business interest which is capable of qualifying for business relief. If 100% business relief is not due, the information provided is needed in valuing the business interest.

Boxes 18 to 21

Provides information needed to value a business interest on which 50% business relief is claimed, and to investigate the claim for relief.

Boxes 22 to 24

These questions will only be answered if business relief is being deducted against

  • a potentially exempt transfer (IHTM04057) that is chargeable by reason of the death, or
  • a lifetime transfer that was immediately chargeable (IHTM04067) where additional tax is payable as a result of the death.

These transfers are subject to additional conditions (IHTM25361) for business relief.